Data Tracking 101: How To Track Customer Data Efficiently (2025)

The transition from brick-and-mortar retail to digital ecommerce has generated a deluge of online customer engagement for businesses. With so much trackable information about your target audience on hand, making sense out of that collected data is a must.

Every customer interaction—from clicks on a website and sentiments on social media to purchases at checkout—leaves a data pipeline behind that your brand can learn from. Fortunately, you don’t need a background in data analysis to understand that data and use it to answer everyday business questions.

Knowing what to track and what tools are best to analyze data can provide valuable insights into how users interact. Let’s take a deeper look at how you can collect and track customer data to improve your marketing strategy and business performance.

What is data tracking?

Data tracking means watching what customers do—where they click, what they buy, when they leave—then using those patterns to make better business decisions. In retail and ecommerce, you’re monitoring website visits, click-through rates, sales transactions, and customer demographics. You don’t need a background in data analysis to interpret that information and turn it into actions that help you understand your business and customers better.

For instance, suppose you see 70% of cart abandonments happen at checkout. This might inform a decision about fixing your payment flow. By contrast, a report revealing that mobile users convert 40% less could lead your team to focus more on implementing responsive web design elements.

Types of data tracking and tools to use

Here are the main types of data you’ll want to track as a business owner in retail:

Demographic data (customer age, gender, location)
Behavioral data (browsing activity, clicks, time spent on site)
Transactional data (purchase history, order value, frequency of purchases)
Feedback data (customer reviews, survey responses)

Luckily, there’s a marketplace of tools vying for your business that can help you collect and understand this data. Popular data tracking software includes:

Web and product analytics tools (e.g., Google Analytics, Amplitude, Mixpanel)
Ecommerce platform analytics (e.g., Shopify Analytics)
User behavior and data visualization tools (e.g., Hotjar, FullStory)
Social media and ad tracking (e.g., Meta pixel, Google Ads tracking)
Customer data platforms (e.g., Klaviyo, HubSpot)
Inventory and sales tracking (e.g., Cin7)
Customer support analytics (e.g., Zendesk Analytics, Gorgias)
Email and SMS performance (e.g., Mailchimp, Omnisend, Postscript)
Conversion optimization (e.g., Optimizely, Unbounce)
Survey and feedback collection (e.g., SurveyMonkey, Typeform)

How data tracking works

Data tracking runs automatically while customers browse, but also includes information they choose to share through forms and surveys. Here’s how it works:

Automatic tracking. Ecommerce sites typically use cookies, tracking pixels, and tags to automatically collect information as people browse. Cookies remember login details and preferences, tracking pixels log clicks and page visits, and tags fire when customers take actions like adding items to cart or making purchases.
Direct customer input. Not all data collection methods are automated. Businesses also collect information when customers fill out forms, answer surveys, or share post-purchase feedback.
In-store integration. For brick-and-mortar stores, data tracking might involve scanning a loyalty card or asking for an email at checkout, then linking that information to the customer’s online profile. This provides a unified view of their activity across touchpoints. You would track loyalty card scans, collect email addresses at checkout, and link physical purchases to online customer profiles.

Data tracking mini case study: Shock Surplus

Sean Reyes founded Shock Surplus, a Los Angeles–based automotive suspension parts retailer that generates more than $25 million in annual revenue. Starting in 2014 with a dropshipping model, Reyes used his tech background to build data tracking systems that monitor inventory demand across multiple suppliers and distributors.

“We have extremely tight data tracking,” he says on an episode of the Shopify Masters podcast. “What that allows us to do is look at 30-day demand, 60-day demand, [and] 120-day demand on products across all the distributors, across the brands. When we notice that there’s maybe 30-day demand nationwide left, we will go in and acquire all that inventory.”

When you can track what’s actually moving versus what’s just taking up space, you get a clearer picture for buying decisions. Spotting that your top product only has two weeks left in stock could push you to grab the remaining inventory before someone else does.

Advantages of data tracking

Data tracking reveals what your customers actually want versus what you think they want. Here are a few benefits you can expect from implementing a robust data tracking strategy:

More personalized customer experiences

One study found that 72% of consumers expect the brands they buy from to see them as individuals and be aware of their interests. Generic “new arrivals” emails get ignored. Customers now expect retailers to know their preferences, and data tracking gives you the valuable insights to tailor experiences more individually. You can use browsing and purchase history to recommend products each shopper is likely to love. For instance, a clothing retailer might send blazer promotions to customers who browse business wear and send casual tee recommendations to those who look at weekend styles.

More targeted marketing spend

Data tracking takes the guesswork out of developing effective marketing and sales strategies. Instead of spending blindly, you can see which sales campaigns or marketing channels (e.g., email, social media, or ads) are bringing in the most traffic and sales.

This information helps you allocate your marketing budget and effort more efficiently, improving your return on investment (ROI) from promotions. Suppose a local gluten-free bakery with an online store discovers that its Instagram ads generate more orders than its flyer campaigns. Once they know that, they can double down on the more effective marketing strategy to increase the number of orders even more.

More informed business decisions

When you track data, you get factual insights that help you make more confident and data-driven decisions across your business. Whether it’s deciding which products to stock up on, what prices to set, or when to run a sale, data can guide you instead of relying purely on intuition.

Trends and patterns in your sales and customer data can highlight opportunities (like a product category that’s consistently growing) or flag issues early (such as an item that isn’t selling as expected). Data quality matters here; reliable insights come from accurate information, and you’ll want to look at historical data to spot long-term trends rather than making big decisions based on individual data points.

Knowing the value of data is one thing, but actually collecting and using data effectively is another. Get the most out of your data with these best practices:

Set clear goals

Before diving into a data tracking plan, get clear about what you and your team want to accomplish—and in what time frame. Identify the key questions you need answers to or the specific metrics—like weekly sales, website conversion rate, or customer retention numbers—that matter most to your business. Your goals might look something like this:

Increase average order value by 25% over the next quarter
Improve first response time from 24 hours to four hours within 90 days
Reduce ecommerce return rates from 15% to 8% within six months

These are all ambitious, yet realistic, goals. Still, you need to understand your current baselines and have solid data before you can make improvements. For instance, to cut down on returns, you’ll need to track which products get returned most frequently and identify patterns in customer feedback about unclear sizing, quality, or product descriptions. Having these clear goals helps you determine what data to track and avoid collecting a bunch of information that you don’t actually need.

Choose the right data tracking software

With a nearly infinite number of tools on the market to choose from, focus on picking tools that match your budget and technical comfort level. For a small business, this might mean starting with user-friendly options like Google Analytics for website data.

If you need to see how people behave on your site, you could add a tool like Hotjar for heat maps, or use a customer relationship management (CRM) system to track customer purchase history and emails. Remember that your ecommerce platform likely has built-in analytics. For example, Shopify Analytics shows you daily sales figures, top-selling products, customer acquisition costs, and conversion rates by traffic source.

Avoid the temptation to install too many tools at once. Instead, pick a few that cover your main goals so you don’t get overwhelmed by data. Whatever tools you choose, make sure they integrate well with your website or store, and take the time to learn their features.

Focus on key metrics

Tracking customer data can produce an overwhelming amount of numbers. Good data tracking focuses on the metrics that directly tie to your business goals. Identify your key performance indicators (KPIs) like conversion rate (the percentage of visitors who make a purchase) or bounce rate (the share of visitors who leave after one page). Concentrating on these core metrics makes it easier to gauge how your business is doing at a glance without getting lost in less important data.

For instance, if you know that your conversion rate and average order value are improving month over month, you can be confident that changes you’re making (like a new website design or a promotion) are working. By keeping your attention on a handful of specific data points, you’ll spend your time on analysis that drives actual improvements rather than chasing every number.

Analyze data, then act on it

Make it a routine to review your reports or dashboard (e.g., checking your website stats and sales figures weekly) to spot trends or sudden changes. This could be a spike in sales after a particular promotion or a drop in website traffic on weekends; then consider what you can do with that information.

If you notice something noteworthy, act on it. Double down on successful tactics (like a popular TikTok marketing campaign) or adjust areas that are underperforming (e.g., update a product page that many people view but don’t buy from). Look at your data regularly, make small changes based on what you find, and keep repeating this process to steadily improve your business.

Respect privacy and compliance

Not following privacy law compliance comes with consequences. Amazon lost its court fight against a record $812 million fine from Luxembourg’s privacy regulator for processing personal data in breach of EU privacy rules, with the court dismissing Amazon’s appeal in March 2025. When tracking data, respect your customers’ privacy and follow relevant laws.

Be transparent with your customers about what data you collect, how you’re storing that data, and why. A clear privacy policy and a cookie consent banner on your website (if required in your region) help build trust. Laws like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) require businesses to handle personal data carefully, which can include letting customers opt out of tracking or delete their data upon request.

Data tracking FAQ

What is meant by data tracking?

Data tracking means collecting and recording information about how people interact with your business. In practice for a retail business, it involves monitoring which search filters people use most, what payment methods they choose, and what time of day they shop most, and then analyzing those facts to understand your current performance and improve.

What is an example of data tracking?

An online store might track how customers navigate its website. Say 100 people view a product page, and 20 of them end up buying the product. This kind of tracking shows the conversion rate for that page (20% in this case) and helps the business identify how well the page is turning visitors into buyers.

What is a data tracking tool?

A data tracking tool is a piece of software that helps collect and organize data about your business. For instance, Google Analytics records website visitor behavior, while a point-of-sale system can log in-store sales and customer information for later analysis.

Why is data tracking important?

Data tracking shows you what’s actually working and what isn’t in your business. You can spot problems early, find new opportunities, and stop wasting time on things that don’t move the needle.